GE Is Trying To Figure Out Who Knew About Immelt's "Chase Plane"

The Wall Street Journal broke one of the most memorable news stories of the year over the summer when it reported that former General Electric CEO Jeff Immelt – who bowed out in June amid intensifying pressure to revitalize the company’s long-suffering share price – would routinely use a "chase plane" when flying to foreign destinations - that is, a second completely empty jet would fly behind Immelt's aircraft. The company has provided multiple justifications for the second plane, including saying it was for security purposes, and to ensure timely arrival for "business critical" meetings.

The story, which has become emblematic of GE’s longstanding tradition of grossly overspending on executive perks, was a major embarrassment for Immelt, who denied reports that he specifically requested the jet, claiming instead that his air transportation was arranged by the company’s corporate air team. Finally, he admitted that he had used two GE corporate jets in this manner up until 2014, when he changed the policy to use "locally sourced jets" as chase planes instead of one of the GE fleet.

Now, in what looks like yet another hollow gesture to try and assuage investors’ concerns about out-of-control spending at the company, WSJ is reporting that the results of yet another internal investigation into Immelt’s in-flight preferences were “discussed at the company’s latest board meeting."

This investigation was purportedly led by William “Mo” Cowan, GE’s vice president of litigation and legal policy, is leading an effort in recent weeks to find out who knew about the extra plane and when they knew it. At first blush, the investigation has the feel of a purge, meant to help the company justify cutting loose any remaining Immelt loyalists.

A similar investigation was reportedly carried out in 2014 after an employee complained to the board about the jets. Though the findings of that probe are unknown, one thing is clear: Nobody was fired because they knew about the jet but didn't inform the board.

General Electric Co. recently conducted an internal review into the flying of a spare business jet to accompany former Chief Executive Jeff Immelt, as it seeks to understand an unusual practice that went on for years and surprised investors when they learned of it in October.

 

The investigation was discussed at a GE board meeting last week, people familiar with the matter said. William “Mo” Cowan, GE’s vice president of litigation and legal policy, led an effort in recent weeks to find out who knew about the extra plane and when they knew it, one person said.

 

It is unclear whether any findings would be made public.

 

Mr. Immelt has said, including in a recent letter to GE’s board, that he wasn’t aware of the backup jet and that he ended the practice when he discovered it in 2014. GE has said that the two-plane practice was discontinued in 2014 and that it was limited to overseas trips with security risks and so-called business critical itineraries.

That’s right: GE conducted a separate “internal investigation” into the two-jet practice back in 2014 after an employee complained to the board. According to Immelt, the practice was discontinued shortly after. But flight records cited by WSJ show the jet was in use as recently as this spring. Furthermore, during Immelt’s 16-year tenure as CEO, GE spent millions of dollars a year on air travel.

Since Immelt left the company before the WSJ story broke, the only person who has been disciplined by the company so far for their involvement in corporate-jet gate is Susan Peters, the company's former head of HR, who recently "retired" after 38 years at the company.

GE’s market cap has shrunk by $125 billion this year as the company’s finances have deteriorated. After taking the reins, Flannery wasted no time slashing expenses, including shedding thousands of jobs and halving the company’s annual dividend.

Jeff Immelt

Meanwhile, Immelt will remain chairman until his retirement at the end of this year.

At that point, Flannery – who has only benefited from this story, which cast his predecessor in a negative light while highlighting his reputation as a fiscally responsible cost-cutter – will be emboldened to continue his push to undo his predecessor's legacy by downsizing the business.

Comments

SoDamnMad BarkingCat Wed, 12/13/2017 - 01:25 Permalink

I worked for GE Plastics Div in the early 80's and  remember a posting about the need for honesty in securing reimbursement for travel expenses.  It mentioned that a number of sales personnel were terminated for falsifying travel expenses and said this wouldn't be condoned.  3 months later another posting said that additional employees had been terminated for expense report violations.   This only pertains to the little people of course.

In reply to by BarkingCat

Utopia Planitia RafterManFMJ Tue, 12/12/2017 - 23:14 Permalink

The theory is, if the jet you are riding in has a problem then you have a backup jet ready to take you to the next destination. Regulations for aircraft are very rigid and encompassing.  There are a multitude of simple maintenance items that can render a jet grounded. A business jet is like driving a Bugatti automobile.  If you suddenly need a replacement part the corner auto shop is not going to have the part in stock.  Yes, you can get it quickly, but quickly means 12-24 hrs.  If you have a tight schedule you don't have 12-24 hrs to wait.I am not suggesting this was a good practice.  I am simply trying to answer your question.  The "chase plane" was nowhere near the jet that Immelt was flying in.  The term "chase plans" was applied to the second jet to grab your attention and enlist a strong emotional response from you.  It is a misapplication of the term.

In reply to by RafterManFMJ

techpriest Utopia Planitia Tue, 12/12/2017 - 23:32 Permalink

I think you are on the right track for the justification. If the CEO is worth $20,000 an hour ($40 million/year), then a 24 hour wait for a spare part is half a million in wasted time. I do not charter jets but I would assume you could charter a jet quickly for that amount of money.

Aside from this, "security" likely means that he is paranoid that any locally chartered plane might be bugged to steal company secrets, or something similarly nefarious.

Still, it seems too paranoid to me, or a case of the CEO having such a high opinion of himself that he is higher than most heads of state.

In reply to by Utopia Planitia

serotonindumptruck SloMoe Tue, 12/12/2017 - 23:13 Permalink

One can only claim whistleblower status after being wrongfully terminated, and if the terminated employee made any attempt to advise or warn their previous employer of any potential illegalities, prior to being terminated, then that terminated employee may not claim whistleblower status.Whistleblower laws exist to protect the employer, not the employee.Any potential whistleblower must prepare the equivalent of a White Paper legal brief that details all illegalities and indiscretions, and they are strongly advised to retain competent legal counsel who specializes in Whistleblower Law.These actions must be performed well before any disciplinary actions or termination proceedings are initiated against the whistleblower.Whistleblower Law is very convoluted and confusing.One must have their legal ducks in a row long before claiming whistleblower status.

In reply to by SloMoe

Yen Cross Tue, 12/12/2017 - 22:48 Permalink

 GE is a haberdashery. Imelt is a fucking bankster puke head.  Paging Carl Icon. GE is a perfect target for Carl. Carl doesn't have access to easy  $'s, so he's gonna go private equity.

Cluster_Frak Tue, 12/12/2017 - 22:50 Permalink

Yup, it's all the whistleblower's fault. fucking douche bags, I mean shareholders, such as granpa Warren, have full faith and credit in managment. Confidence must be restored and crisis averted.